Outsourcing Excellence Award – Best Partnership – City of Minneapolis and Unisys

Building a strong foundation for a new relationship is crucial for its future success. That’s certainly true for the City of Minneapolis and Unisys, who won the Best First Steps Outsourcing Excellence Award in 2004. The young relationship’s goal was to make IT valuable to the city’s agencies and voters. Five years later this duo has captured the best in show award because it has done what it set out to do in 2003 … and more.

The city’s original IT challenges

The City of Minneapolis wanted to outsource its IT infrastructure, which eventually included management of its security cameras and 911 applications; everything was past end of life. The city also needed to build a tier-3 data center.

“Annual budget shortfalls were a problem,” says Jeff Wilke, Unisys’s program director. “The city departments didn’t see why they should spend money refreshing computers when they could use the money to hire more staff,” he says. “It was a tug between the old school and the new school.”

The city did not have the staff to both keep up with the daily operational break/fix work and work on new technology solutions that would add the business value the citizens wanted. “Routine infrastructure management, remedial maintenance, and network management tasks diverted the department from its core mission of providing information services and planning for better use of e-government systems for all users,” recalls Lynn Willenbring, CIO. In fact, 60 percent of the city’s IT budget was devoted to keeping the infrastructure alive.

Yet the IT department wasn’t doing a great job; the network “had a lot of outages,” recalls Willenbring. The city had also started a migration to Windows 2000 to upgrade both its Microsoft Office suite as well as its operating system. “We were struggling and had made little progress. Outsourcing allowed us to turn it all over to Unisys.”

Attracting talent was another issue. The city could not compete in the marketplace for top technology talent because of government wage restrictions. Finances also meant the city could not cost-effectively staff a 24/7 help desk.

“They wanted to move a city of the past to a virtual city of the future,” says Jim Collins, managing director of client management for Unisys and the Minneapolis program director from inception through 2007. “But they didn’t have the money or the energy to tackle the things on their radar screen.”

Supplier selection

Only a limited number of suppliers responded to the city’s original RFP because the city council required the supplier to hire up to 20 of its staff and locate the data center in Minnesota. “Those requirements reduced the number of finalists to two suppliers that could provide the service,” says Willenbring.

To decide between the two, the city looked at depth of experience and their ability to deliver. Another factor was the comprehensiveness of the service offerings “because we needed an end-to-end outsourcing,” continues Willenbring. “And of course price,” she adds.

The CIO says at the outset cultural fit was “a huge issue” because some city staffers as well as some elected officials “were not happy about outsourcing. They believed this is something the city should keep in house.” She felt it was important for the supplier to enter the situation with its eyes wide open, given “the sensitivity it was walking into.”

Willenbring adds, “flexibility was important because we knew that our culture would not tolerate a provider that was rigid. We needed somebody that would not make us jump through process hoops that had no value-add just because it made everybody else jump through those hoops.”

She says the city selected Unisys because it offered “a tightly integrated IT solution that transcended business units and offered a one-stop strategic partnership.”

Transition

Willenbring divides the relationship into two distinct transition periods. In 2003 she says the primary challenges were tactical. The partners transitioned everything, including the staff, in 12 months. “Moving the city’s data center to Unisys’s data center required professional management and seamless collaboration. There was also cultural acclimation between our two organizations,” she recalls.

The first unanticipated challenge was the huge variety in end-user and server hardware. “There was a lack of standardization, which was quite a surprise for Unisys. We ourselves didn’t realize just how big the issue was until we started the transition,” she says.

The most recent transition followed the expansion of the contract in December 2007. The new contract was “more strategic.” The partners also wanted to add current industry best practices to the governance piece. “We increased the service level agreements (SLAs) significantly, adding 28, to make sure we monitor the important items: outcomes and results,” says the CIO.

Second, the city wanted “greater transparency around costs and the flexibility to have some control over them.” Willenbring says the original contract had fixed pricing; now the city pays for usage per month.

Today Unisys has 215 servers and 336 network devices servicing the city; it manages 3,650 desktop devices and 1,100 printers. It averages 1,600 service help desk calls and 4,400 e-mails per month.

Going the extra mile

Fortunately the two partners had already steeled their working relationship when tragedy struck: the I-35W bridge in Minneapolis collapsed on August 1, 2007. “That night we activated our emergency operations center (EOC),” says Willenbring. “We were at the EOC in six minutes,” adds Wilke.

She recalls working at the EOC in the basement of city hall coordinating rescue efforts with the police and fire departments when she got a call from the Unisys program executive. The data center reported its ISP was nearing capacity because so many people sought information on the city’s Web site. Unisys immediately added the extra bandwidth needed “because the world was watching,” says Collins.

“I never would have thought of our Web site that night. Unisys was observing things more closely than normal. It was nice knowing I had a partner watching out for me as well as one that provided the additional services we needed,” she says.

The command center at the bridge collapse site was in a tent. Willenbring says Unisys’s desk-side techs were “down there 24/7. They made sure somebody was always there to deal with any IT issue the fire or police chiefs had. There was no ‘Well, it’s not in our contract’ or ‘This is going to be a time-and-materials charge.’ Nothing like that. It was just ‘This is what we do because we’re partners,'” she says.

The city applied the lessons it learned from the bridge collapse to ensure the success of the Republican National Convention. “We modified our EOC and brought in a huge amount of technology,” she says. It set up a joint command center for the police, which included the Secret Service and FBI. “This was a huge, huge technology project to get all that in place in the preceding months,” she says.

But Unisys was there for the small things, too. Willenbring remembers when she needed to hire another person for computer-aided dispatch (CAD) support but didn’t have the financial resources to do so. She went to Unisys and asked if there were a way to save some money on this CAD contract. She wondered if Unisys could cut the support 50 percent and still maintain the SLAs.

Unisys said no but asked what she was trying to achieve. “We saw her list of cuts and added our own,” says Wilke. “They understood our need,” adds the CIO.

Results

“When this relationship started, we said, ‘Go forth and take care of this mess.’ They were able to do that, which was huge,” reports the CIO.

Taking care of the mess enabled the city to focus on strategic initiatives like the deployment of a wireless network that covers all 59 square miles of Minneapolis providing residents, businesses, and visitors with broadband access. The partners worked to ensure the new wi-fi network supported seamless connectivity to the existing infrastructure. The network “makes our city operations run more efficiently. For instance, building inspectors can file reports and access data in the field and firefighters can view floor plans on the way to a fire,” says the CIO. She adds the wireless network was crucial to the city’s response after the bridge collapse.

Unisys initiated a new 911 application for police and fire. “Now dispatchers know where every police and fire vehicle is located and the quickest route to the incident,” explains Wilke. “That means residents get the emergency help they need sooner.”

Customer satisfaction increased, according to an outside consultant the city hired to perform an objective review. The IT department’s average service delivery improved 32 percent. Desktop support enjoyed a 55 percent improvement and disaster recovery had a 114 percent improvement. (Not surprising since the city had no disaster recovery before outsourcing.)

Willenbring says the city saved $18.2 million in direct-cost avoidance over seven years. What did the city do with the savings? It hired more police officers and invested in technology to support public safety. In addition, the city now has an extensive public safety camera system thanks to these savings.

Unisys is helping the city with its green efforts. Wilke says the supplier is leveraging innovative technology with installed chips in PCs so the city can remotely turn them on and off.

IT has improved the lives of the citizens. “Our safety camera system has contributed to a 32 percent reduction in robberies and a 34 percent decrease in car thefts. It also allowed the city to avoid $6 million in settlement costs,” Willenbring continues.

Why this relationship works

Willenbring says from the first day Unisys approached the relationship in a spirit of partnership. “Some suppliers say ‘This is how we do it; sign here or else.’ And the city’s boilerplate contract language is problematic for some larger suppliers. Rather than walking away, Unisys said, ‘This is a problem for us, so let’s talk about how we can figure out a solution instead of drawing an arbitrary line in the sand.'”

The partners built continuous improvement into the service levels. “If Unisys finds efficiencies, we get some of the benefit of those savings,” says Willenbring.

She points out the relationship’s new performance-based metrics clearly helped the supplier, too. “The more they perform, the more business they get from us,” she explains. For example, the initial contract was $8 million a year. The city added $9 million worth of business because “Unisys proved it could provide the service well. That’s a huge performance incentive for them,” she explains.

Willenbring believes Unisys recognizes this relationship “helps Unisys make its service offerings the best they can be and therefore more attractive to other clients. I think that’s helped strengthen the partnership.”

Adds Wilke, “We realized we are a full-fledged part of the city’s management team. We feel pride when we see a fire truck race to the scene because we know we are part of that process.”

Here’s why she believes this relationship deserved the Best Partnership Award: “Before we outsourced, we were so focused on just keeping everything running that we couldn’t really focus on what the city needed to move forward. Since we outsourced, it freed up my department’s time to focus on the strategic value of technology. We’ve been able to launch some huge initiatives that we never would have been able to undertake before, such as our border-to-border wireless network.”

Lessons from the Outsourcing Journal:

Technology can improve safety and the quality of life in a community. Suppliers become deeply involved in these types of outsourcing relationships because they see the palpable results and take pride in their work.

Investing in futuristic IT infrastructure helps cities deal with unexpected disasters. Having an outsourcing supplier there to help contributes to a successful intervention.

Second-generation outsourcing contracts often attack strategic projects after the first generation tackled the tactical issues.

Criteria for the Best Partnership Award: The relationship must qualify for at least three of the other Awards categories. It can have won an award in another category in previous years. Both parties adopted a partnering approach at the outset and continually operate from this approach. They communicate openly, honestly, and proactively.